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A variety of organizations have lined up against an expected Labor Department fiduciary rule requiring that retirement advice to retail investors be motivated by the client's best interest. Critics have expressed concerns about unintended consequences and say that by making the payment of commissions suspect, the rule will hinder many people's access to financial advice. "Millions of Americans will not have an advisor anymore," said Chris Paulitz, a senior vice president at the Financial Services Institute.

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The Department of Labor's proposed fiduciary rule has generated plenty of critics. FSI and other groups support service improvement for consumers but say the proposal as written falls short. "We are concerned that the proposal will make it significantly harder for consumers to receive high-quality, personalized retirement advice," according to a comment letter from FSI. "We are especially concerned that advice for clients with small account balances will become cost-prohibitive if the proposal goes forward as written, thus decreasing investor access to retirement advice from a trusted advisor."

FSI, which has long supported a uniform fiduciary standard, has reiterated that a proposed rule would be costly for all advisors, regardless of business model. "We are very concerned about the potential negative consequences," FSI President and CEO Dale Brown said.

The financial-services industry will be better off if the Securities and Exchange Commission takes the lead on writing a fiduciary standard, according to FSI. "It is clear that the SEC, with an 80-year history of regulating the securities markets, has a depth of knowledge and expertise that is unmatched," FSI General Counsel David Bellaire said. "We and other trade organizations will be working to ensure that the SEC moves forward with its rule-making."

The Securities and Exchange Commission's rules for money market mutual funds strike the right consumer-access tone, according to FSI. "Our goal throughout this debate has been to preserve the viability of money market funds for retail investors," said David Bellaire, FSI's top lawyer. "It appears to us, at first blush, that the commission shared that goal and have adopted a rule that will allow retail investors access to the products."

Financial advisers and their clients have a lot at stake as the Securities and Exchange Commission works on a fiduciary standard, and advisers should actively express their views as the process moves forward, writes David Bellaire, executive vice president and general counsel of the Financial Services Institute. One area to watch, he writes, is disclosure requirements. "[O]verly burdensome disclosure and other compliance requirements can hurt investors by discouraging investors from reading the materials provided, driving up the costs of investing and limiting their access to professional advice," he writes.